Are Research Foundations eligible? This kind of award sounds like something a University might hypothetically run a proposal through the Foundation side for, if a 501c3 has to apply. If so, I might go that route and ask them to issue the award notice to the correct entity name to lock-in the understanding that you've disclosed openly to the sponsor the situation, and sponsor has confirmed in writing to waive their rules or to reissue to the entity you identify as appropriate. I would worry less about the relationship with other Universities, we all know things go sideways sometimes-- ultimately it's the sponsor that needs to be accountable for their own rules and if/when to bend them.
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